Is the New Amazon and Whole Foods Partnership a Nail in the Coffin for Traditional Grocery Stores?

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Exults, an advertising agency based in Fort Lauderdale, Florida, explains why brands should up their digital marketing strategy with Amazon and Whole Foods' latest partnership.

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Consumers are constantly evolving their shopping habits. In today’s digital world, it is critical for brands to understand that their consumers are moving towards the internet.

On June 16th, 2017, the eCommerce giant, Amazon announced their purchase of Whole Foods for $13.7 billion in cash. The deal values Whole Foods at $42 a share, which was 27% higher than when stocks closed on Thursday, June 15th. Amazon explains that Whole Foods stores will continue to operate under the Whole Foods name as a separate entity.

Even with over 90 percent of daily purchases continuing to take place in physical stores, according to the Q1 report published by the U.S. Census Bureau in May 2017, eCommerce sales topped $105.7 billion, a 4 percent increase from the close of Q4 2016.

Many major traditional grocery store chains are researching and investing in cost effective online shopping and delivery services to compete with online retailers and enhance the customer experience, but the costs for providing these types of services are high. Therefore, in addition to the added expense of grocery delivery services, many consumers are still leery about purchasing perishable foods and items online, which means making the trip to a physical grocery store the better option—at least for the time being. However, with the new Amazon and Whole Foods partnership, it will be interesting to see how Amazon revolutionizes grocery shopping.

It’s Time for Traditional Grocery Stores to Rethink Digital Strategies.
While the majority of consumers aren’t willing to hand over the extra bucks to have their groceries delivered, many purchases still happen in brick-and-mortar stores and traditional grocery stores still struggle with declining sales and increasing shipping and storage costs. They also struggle to meet consumer demands while also remaining relevant. As a result, many traditional grocery stores must rethink their digital strategies if they want to solidify their spot in the market in 2017 and beyond.

When asked about the growth of online shopping, Exults founder Zach Hoffman claims, “Consumers are constantly evolving their shopping habits. In today’s digital world, it is critical for brands to understand that their consumers are moving towards the internet. While they may be weary of purchasing perishables online now, that mentality will start to change in the near future as online shopping becomes even more convenient.”

Overall, traditional brick-and-mortar grocery stores continue to face serious challenges in today’s digital economy. As a result, grocery stores need to rethink their digital strategies if they want to remain relevant and competitive, especially with the Amazon and Whole Foods partnership.

Exults is a digital marketing agency based in Fort Lauderdale, Florida that specializes in helping businesses with the online marketing movement since the early 2000s. Since then, the Exults team has worked with businesses of all sizes and industries to help improve efficiency and results.

For more information on Exults online marketing services, visitors are encouraged to visit their website and an Exults team member will be happy to assist.

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